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Closing Bell

News/Business. Maria Bartiromo, Bill Griffeth. (2012) New. (Stereo)

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01:00:00

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San Francisco, CA, USA

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Comcast Cable

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Virtual Ch. 58 (CNBC)

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mpeg2video

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ac3

PIXEL WIDTH
528

PIXEL HEIGHT
480

TOPIC FREQUENCY

Us 25, Washington 11, Harry Reid 10, Boehner 5, S&p 5, Michigan 5, Ho 4, Alan Greenspan 4, Xavier Becerra 3, Orrin Hatch 3, Becerra 3, Lynn Jenkins 3, John Boehner 2, Ron Mott 2, Ethan Harris 2, Ethan 2, Aig 2, Geico 2, Rick Santelli 2, Chris Van Hollen 2,
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  CNBC    Closing Bell    News/Business. Maria Bartiromo,  
   Bill Griffeth.  (2012) New. (Stereo)  

    December 11, 2012
    3:00 - 3:59pm EST  

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rest of us who are aging. i think we should be in charge, don't you, brian? on that note, thank you so much, everybody. we've got a rally going on out there. it looks as if the street is expecting some kind of deal, but as bob pisani's been saying, i'm wonder if it's a bite rumor and sell the fact situation. >> more negative now than when i came down here. >> that's not very encouraging. where's the hope "closing bell" is next. >> a government fractured, a market paralyze. a call to action our markets careen towards the sharp edge of the fiscal cliff. we've is asked our politicians to seem compromise and find a solution. the clock is ticking down. the stakes are getting higher. now we're turning up the pressure. this is a cnbc special report,
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"mission critical, rise above d.c." >> and we do welcome you to "closing bell." i'm bill griffith here at the new york stock exchange. hey, maria. >> hey there, bill. big rally where you are. i'm bartiromo coming today from the white house for our special coverage. stocks rallying on the on the missile that perhaps we are nearing a fiscal cliff deal. coming up we'll, find out from key lawmakers in the fiscal cliff negotiations how we can actually get a deal done before the deadline. representative chris van hollen, lynn jenkins and javier becerra as well as sore orrin hatch with us. we'll hear from former treasury secretary altman and jeff greenfield. bill? >> stocks are trading off the highs of the day with less than an hour to go. final hour, really from the get-go. optimism about the cliff talks and senator harry reid made some comments this afternoon that put a damper on that real.
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we've lost about 30 points. in that time. up 74 on the dow at 13,244. the nasdaq is doing well today, up 32 points. more than a 1% gain, although it is off its highs of the day at 3019, and the s&p 500 index is 8 plus points at 1426. the word on the street is because of the fiscal cliff, some investors are actually selling the winners, the winning stocks, and they are holding on to the poor performers, the opposite what have they have been doing the last few years. maria? >> makes a lot of sense given the fact that tax les go higher on capital gains. you want to get out of some of those names. let's find out how you should be investing 20 days away from the deadline. in today's "closing bell" exchange, carol roth with us, rich peterson from is & p, jonathan corpina from meridian equity partners and our own rick
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santelli. good to see you all. jonathan, we'll kick this off with you. what's the right strategy going into these negotiations and going into year end? >> running out of time at this point, and as the days trickle down look to this week and next week. after that everybody in holiday mode and trading sessions will be very, very light. at this point we still talk about the santa claus rally, can't forget with that, but as we get closer and closer to the deadline i think that inside people feel that we are going to get some sort of resolution put in place. when everybody's back is against the wall smarter minds will prevail and come to sort sort of a resolution, but right now the comments that we got a couple of minutes ago out of washington does not really help the situation. >> so what's the strategy, jonathan? what's the strategy given the comments that we just heard. >> not knowing what taxes will be like next year, i agree with what you said before earlier. you have to take some of the profits off the table, pear down some of your risk and exposure and hold on to ones that you think in the locker term will have performing gains. >> joining us late, the comments we're talking about came from
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senate majority leader harry reid who said he does not expect a deal before christmas, and he also said if the republicans are expecting the democrats to come up with a list of spending cuts they want, it's not going to happen. they are expecting the republicans to come forward with that first. those are the comments that we've been talking about. carol roth, you're the one that's been identifying those financial planners who are telling their clients sell those winners, and to hang on to the losers here. >> right. this is completely backwards to what they would normally be advising their clients. i'm from the midwest so i'm talking to people who say they are conservative. normally they would be harvesting losses right now. it's just the opposite this year. they are say going ahead. take any gains that you have, hold on to those losers, and i think that that's going to play into what's happening in the last couple of weeks. actually it's going to create buying opportunities come the first of the year. >> if they are selling, rich peterson, they are missing out on what you expect to be a pretty good raly. >> all the talk about doom and
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gloom, forgetting about the special dividends. every day s&p 500 companies, major american corporations issuing special dividends, sell those special dividends. >> that's a really good point. rick santelli, where exactly are we in terms of this market, and what's behind this rally? do you think there's actually a deal in the air? you heard what reid just said. it seems actually that it's not happening, and yet we've got this real under way for stocks. >> well, i think there's a lot to be said for our one trader who said smarter heads will prevail, and i think a lot of investors are taking that route. as much as i love my rise above pin, i am not officially in the camp that we're going to get a solution. i think harry reid's comments sum it up. that is, there is no way that the democrats really want to talk about spending, and i know that the republicans have been light on detail as well, but if the issues facing this country are tackling the biggest part of what we spend in the form of entitlements, we are kidding
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ourselves that anything is going to be done in a timely faction. they are going to want to do the tax part and kick the rest, and i'll tell you what. i think a lot of conservatives will go along with the potential tax increase, but they are not going to take a promise on the rest of it, so i think it's going to get ugly. >> you know, carol, are alan greenspan is going to tell us later in the program that maybe we should go over the cliff, that the minor recession that is expected as a result is a small price to pay for greater fiscal reform in this country. >> you know that i believe that. you're teeing that one up for me. >> i'm giving you a softball here. >> i'm all about accountability and responsibility so i would love to see us go over a fiscal cliff or at least tie some metrics to what we decide. my biggest fear is we end up a deal that kicks the can down the road and doesn't solve anything, and i think that that is the biggest problem facing us. either go over the cliff or come
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up with something with real solutions. >> rich peterson, let me get your take on earnings in 2013. we know the expectations on the economy if we go over the fiscal cliff, that the economy will see a contraction of a couple of percentage points. where are you on earnings for 2013, what are your expectations? >> maria, look at the s&p numbers, looking for a slow single digit percentage gains. for this period of the fourth quarter looking for gains in telecommunications and financials. i think the critical part, investors ought to be very keen just to weigh in the risk, you know, and the fact they had a very rewarding year in 2012, we were up about 12% on the s&p 500. earnings will be very much held captive by the fact that the uncertainty not only about the fiscal cliff but debt ceiling. >> very quickly, john, we're lose altitude in this market rapidly. what do you make of this, and what are you expecting to close
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here? >> just shows you how fragile our markets r.one comment out of washington can take profits off the table intraday. we'll hold on to our gains here. >> thanks, everybody. we appreciate it. where exactly do we stand in these fiscal cliff negotiations in the latest now from our john harwood, on your stomping ground. good to see you both. what do you make of this comment from harry redd, john, saying it's unlikely we get a deal by christmas? are they posturing? they don't want to put their spending cuts on the table but want the republicans to. is this posturing? >> i think it's posturing. jay carney gave a white house briefing saying i'm not going to reveal anything about the status of the talks in negotiation beyond the fact that they took place. the support trying to hammer republicans publicly. he's got the high side public opinion on this. traveled to michigan yesterday. john boehner went on the floor
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and said i need to see their spending cuts. that's what's going on in the public level. privately staff are working together and the fundamentals remain in place for a deal. don't know if it's before or after christmas or before new years or just after it, but i believe will happen. >> all the vacations are planned, right? >> we've reached one of the weirdest days because speaker boehner came out and said the president has not offered specific spending cuts and the president says we've offered spending cuts and it's gotten to this point of childish points and these guys are saying did not and these guys are saying did, too, and these guys again saying did not. i agree with john. they need to get really close then because then there's a sense of urgency and that's what they feel like they can get the votes to get this done right up to the edge of disaster. >> it's not he said, she said. they have put out spending cuts. >> $600 billion that the
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president talked about in his proposal. >> less than that on medicare, somewhat of a third of that on medicare. the problem is medicare cuts are very, very unpopular deeper they are, so the reason, you know, the president's put his revenue ask out there. wants taxes to go up on the top 2%, that's very popular. the stuff that the republicans want, deeper cuts in entitlements, that's not popular hand that's why they are trading who is going to propose their proposal first. the republicans said we want to raise the medicare eligibility age, whether you like the idea or not and change the inflation adjustment. the question is what in addition to that gets done, and who is going to lay it out on the table first? >> will we get specifics from the white house on medicare cuts? >> not until they have to get them. >> so the final week of the year. >> possibly, yeah. right before we get a deal we'll get some specifics and the reason is they are going to get hammered on both sides from the political bases. amazing moment from jay carney in the briefing saying i'm
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trying to be as opaque as possible about what happened in the meeting between the president and speaker boehner on sunday. they don't want to talk about it and they are acknowledging they don't want to say. >> truly honest. >> medicare cuts are extremely unpopular with the public. that's the difficulty >> i know you're following this as closely as anybody, so we'll be back to you on that. bill, over to you. >> we'll head to the close with 50 minutes left. when we came up at the top of the hour, up 100 points and the harry reid comments have taken the wind out of sails of this rally. up 65 and we'll see how we do as we head to the close, maria. >> a huge show ahead from washington and wall street. up next, representative van hollen is here to tell me what spending cuts developments are willing to give up. >> and also senator orrin hatch says the white house's willingness to go over the cliff is one of the most irresponsible things he's heard what.
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we're going to take you to
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lansing, michigan, where a dramatic story is developing at this hour. thousands of union supporters have swarmed into the state cap hole there to protest a so-called right-to-work bill that was just passed by the state legislature. it's expected to be signed by the governor. nbc's ron mott is in the thick of it with the latest. >> reporter: all those protesters are starting to make their way away from the stateho measures passed the house. i just came back with an interview with the governor who expects to sign these two measures tomorrow, though it could happen later tonight. no signing ceremony because of the contention surrounding the issue. one of the things that a lot of workers on the ground talked about says it's an issue of fairness. it's unfair for non-union members to benefit from generations of hard work, all the advancements for organized labor and blue collar workers
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through the generations. the governor says they believe this makes michigan more competitive not just to attract businesses here but around the world to attract international companies to michigan and puts them back on a level playing field with other states that have passed similar legislation. if the governor signs this, as expected. michigan will become the 24th right to work state, joining a lot of other gop republican-controlled legislature. a partisan issue, republicans versus democrats. the governor says that this is about fairness, that every worker should have the right to choose to join a union rather than being forced to join one as a condition of employment. >> the irony is not lost on anybody that michigan for decades, a bastion of unionized workers in the auto industry, and now they will become a right-to-work state. fascinating developments there. ron mott in lansing, thanks, ron. >> you bet. >> 20 days left to get a deal done on the fiscal cliff.
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house speaker john boehner said he's hopeful it will happen before the deadline, but speaker boehner making the case accepting the white house's plans would make the u.s. problems worse. listen to this. we did exactly what the president wants, we would see red ink for as far as the eye can see. that's not fixing our problem either. it's making it worse, and it's hurting our economy. >> so what's it going to take for both sides to come together and strike a deal? let's ask our next guest, congressman chris van hollen of maryland, the top congressman on the budget committee. welcome back. >> always good to be with you. i understand maria was just down on capitol hill. >> sorry i missed you. >> come on back. >> she will be back. we will all will, because we're all taking the temperature right now. how hopeful are you that you get a deal in a timely manner on this miss call cliff right now? >> well, i think there's a better than 50% chance that by
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the end of this month, so by december 31st, there will be an agreement, but obviously there are lots of hurdles to go before we get there. the good news is the lines of communication are open, as you've been reporting. the other good news is many of our republican colleagues recognize that the strategy they had been pursuing isn't working, and -- and the president's also been very clear that he's prepared to make some compromises and tough decisions to get an agreement. >> congressman, let me ask you. no doubt you heard what your colleague, leader harry reid just sait said, and said it's unlikely this a deal gets done before christmas. why is that? >> well, there's still a lot of agreement that has to happen. i mean, i think, that you know, the deadline, as you know, is the end of the month. obviously the sooner the better. obviously everybody would like to get it done by christmas, but, you know, the main thick is that we get it done by the end
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of the year and avoid the fiscal cliff, and that's what we're focused on. >> the other thing that senator reid said was that it's up to the republicans to come up with the spending cut proposal, not the democrats. do you agree with that? i mean, shouldn't both sides be sitting down and putting their cards on the table? we only have a few days left before the deadline here, sir. >> i'm having trouble hearing you and i got the gist of it. here's what i would point out. i have speaker boehner's letter a to the president in my hand where they call for $900 billion in cuts but don't specify how they are going to get the cuts. the president, on the other hand, if you look at his budget, it's on the internet, he spells out in great detail how he's going to get the $600 billion cuts. another very important fact to know is that the republican ryan budget, the one that passed the house last year and senate republicans supported, that budget has less medicare savings over the next ten years than the president's budget has medicare savings.
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they just don't like the way the president achieved his medicare savings. >> how would you achieve the medicare savings? for example, are you ready to say that you would be, for example, willing to change the ainge for recipients to achieve? >> maria, i'm losing sound here. i cannot -- >> can you hear me, congressman? >> very faintly. >> she's asking whether means testing would work with medicare, would you up the age of eligibility for medicare? >> i think i heard that question. look, there's a very different approach on medicare savings. the republican prob proposal, as you say, is to shift rising health care costs on to the backs of seniors because changing the age doesn't do anything to contain growing health care costs. what it does is transfer those health care costs, whereas the approach the president has taken is to build on the accordable care act where you better coordinate care. he has a provision to reform medigap and has provisions that
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asks form suit call companies to increase the rebate, to go back to where it was in 2003, so it's not that we can't find savings in medicare, it's every republican proposal is to transfer the rising costs on to the backs of seniors whose median income is under $22,000. i would hope we would all agree to find best way to reduce medicare costs, and the other thing i would say, getting a little whipsawed here. less than four weeks ago the republican colleagues would were saying that the president had saved too much in medicare, $716 bill beyond and now the complaint is he's not saving enough when his budget has more savings. he just doesn't do it the way they want to do it. >> congressman, we'll be watching. thank you so much for joining us. thanks very much. >> we'll tell him when he's off camera. too bad about the sound. that's how things work sometimes in live television. heading towards the close. 40 minutes left.
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continuing to lose ground. the downo now up 60-plus points. at the top of the hour almost a 100-point gain. >> another big story, the government announcing plans to sell the remaining stakes in aig. up next, whether that's an opportunity for you to buy the stock. >> later, former fed chair alan greenspan will tell us what happens to your stocks and your money if we do go over the fiscal cliff. that's coming up on "closing bell." you won't take my life.
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as you know, the treasury department is selling the rest of it stake in aig for $76 billion. shares of the insurer up more than 4% today, but this year a gain of roughly 50%. government selling aig at a big profit of roughly $20 billion. does that mean you should be buying aig right now as the government is unloading its shares? that's what we're talking about and talking numbers today on the technical said. ennis tanner who is neutral on this stock and on the fundamental skok it's matt goad and you like the stock here, matt. why would you go the opposite of uncle sam. they are selling, at a profit. why would you buy here? >> thank, bill, and thank you for having me. great to be on here with ennis. why i specifically like it. the government is out of the way. they were not a voluntary
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investor in this in four years. the overhang the street has been dealing with since they have made this investment is over with. you now have a company trading for half a book. they just sold ilfc for over $3 billion. i see a stock buyback coming and to me that's buying dollar bills for 50 cents and that's a good thing to be doing. >> and why are you lukewarm? >> if we look at the chart, bill, i'll show you what gives me pause. the one-year pause which comes up shortly shows that in fact the stock has had a trend change. looking at 200-day moving average, downward slope to start the year and the $32 level, significant support, so it's not a bad chart, but there's a lot of overhead resistance around the $35 and $36 area so i think in the near term it needs some time to absorb this supply. this is a $10 billion sale almost in terms of dollars that were put on to the market here, so i can wait for it to slow
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down. >> i can see, that and obviously i'd like to buy it a little cheaper, and i think we'll get the chance as we digest, but overwhelming response to the offering and the fact that the stock is up so much from what we did in a very big deal is telling you what the demand is like for the company. my target, i don't know why it doesn't go 38 where it was before or up to 41. >> in mike's defense, the stock looks like it's in much stronger hands than it was two, three years ago, and there's no more government supply coming. >> i agree 100% with enis. i think 32 looks like a great part. again, if you look at the chart, when this things makes moves, the last move was from 34 to 24, the move it just made is ten pints from its slow. would i say the next move is, you know, to 41, and that's a pretty good return from this price >> i sense you guys are not all that far apart in your opinions on this stock, if only you were
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the ones negotiating the fiscal cliff. thanks so much for joining us on "talking numbers." >> up next, we'll ask leader from both parties what they are willing to give up. representative lynn jenkins and x xafier becerra will join mvier .
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all right. let's take a look at markets as we head towards the close. 30 minutes left, maria, and, you know, the optimism of this morning has been tempered by those comments from senator harry reid, apparently, that we would not have a deal, he didn't think, before christmas, and that it was up to the republicans to make the first move on spending cut proposals, not the democrat and a 100-point gain became 573-point gain on the dow. the nasdaq still doing very well. technology hanging on to their gains. apple is up smartly today with a gain of almost $12, back to $541, and the s&p up as well,
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but, you , the mood, it's clear again, this is one of those days where wall street is keeping a very close eye on the nuances coming out of washington. >> what nuances there are. the republicans want spending cuts, and then they will, i guess, go along with higher taxes, but the dems say we won't put those on the table. you till us what the spending cuts are. it's tit for tat. at the end of the day, we're not going to get a deal and if we are going to get a deal it will be in the 11th hour, december 30th, december 29th, the end of the year. >> you're a chart wonk like i am. we were watching it yesterday, the two model portfolios that cnbc's research staff put together. one would do well if we go over theically. one would do well if we don't go over the cliff, and to this inter,point one that would do well is the one that would put us over the cliff, until yesterday, and then sudden lit avoid the cliff portfolio
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reversed course and went higher and so these portfolios are betting now that we will get a deal and not go over the fiscal cliff which i find very interesting. don't you? >> really is. just back and forth, and these markets are hanging on every word coming out of washington. all about the sentiment. we'll take a break and come back. i just got word that the sentiment is to the up side as we head towards the close, and the dow is up 71 points. >> up next, one of bank of america's top economists has the three most important things you need for investing in 2013. we'll talk to him. >> also ahead, former fed chairman alan greenspan is back. he rebelieves a recession from going over the cliff would be a cheap price to pay to fix our policies. he'll explain why in an exclusive interview with maria coming later on "closing bell." [ male announcer ] you are a business pro.
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>> goes without saying the clock is ticking towards the fiscal cliff, and today leadership on both sides of the aisle fired shots across the bow attack thing the other for not playing fair. a short time ago it was senate majority leader harry reid who said it would be tough to get a deal done by christmas, and it's
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not up to the democrats to make the deal on spending cuts. what does this mean in getting a deal done in a timely fashion? >> joining us from the hill congressman xavier becerra and also with us is lynn jenkins, representing kansas and vice chairman of the house republican conference. good to see you both. >> welcome. >> thanks very much for joining us. representative becerra, let me kick this o.are we closer to a deal today than a week ago? what's the holdup? >> a close as we were a week ago because there's an easy solution here and that is accepting what republican congressman tom cole said we could do is pass the senate bipartisan bill that's been sitting in the house for several months. that at least gets us to part way to where it goes and starts us on the way, so we can get there. everyone can get bogged down with some of the details and someone sitting in the house that can get us quite a bit of the way there and help the middle class by protecting them
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from a tax increase. >> representative jenkins, would you vote for that bill, and are you in favor of raising the taxes on the top income earners in the country just to get a deal as many republicans say they now would do? >> i think the majority of republicans are committed to fixing the problem, and by just raising rates on the top earners you got enough revenue to pay for eight days of federal spending. that's not a solution, that's a distraction. the problem is the out-of-control, wasteful washington spending, and so we're going to demand out of this deal some cuts to rein in this out-of-control federal spending. >> but i was asking about the bill that congressman becerra was referring to that would extend the tax cuts to the middle cuts in the house right now. would you vote for that? >> we want to extend the tax
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cuts for not only the middle class but for all hard working american taxpayers because we have put revenues on the table. we have $800 billion in revenue, and not all revenues are created equal. we believe our approach is better. it is a comprehensive overhaul to the tax code. the president's proposal simply raises taxes on the wealthy. it doesn't solve the problem and pays for eight days of federal spending. the ernst a.m. young study says it costs the economy 700,000 jobs and as a cpa, any cpa worth their salt already has a tax plan to plan around those higher rates. >> congressman, what about that, representative becerra? republicans countering if the taxes are going to go up, meaningful spending cuts have to be made, especially in the ent time programs. number one, are you willing to vote for cuts in those areas,
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and, number two, why is it that the dems will not put any spending ideas on the table and are asking for the cuts from the republicans? >> maria, the last point is not true. >> harry reid just said it. >> maria, we've seen close to $3 trillion worth of spending cuts already enacted into law that democrats have supported and voted for. >> we're talking from here on out, you know that. we're talking from here on out >> you may be talking from here on out, but the american people have already said they want to see a balanced approach, and if you see only cuts, you want to see those who have benefited from the tax breaks the most contribute a little bit as well, and so i -- i quite honestly heard something positive in what lynn just said because she said she wouldn't vote against the bipartisan bill that would protect the middle class. she wants to see something more perhaps, but at least we don't have republicans saying no, we'll oppose the middle class tax cut, so that gives us an
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opportunity between now and the end of the year to make progress. everyone has an idea of what's a better solution. >> wait a second, you don't want to hear something cut from the republicans but willing to go along with it for your party. your party is saying no deal unless the top rates go higher. how is that any starting point? >> that's not accurate. >> that's not accurate. >> of course it is. the president said he won't make a deal unless the higher rates go up. that's exactly what the president said. >> the president campaigned for over a year indicating that he was going to ask the wealthiest 2% of americans to return to the tax rates they had under president clinton. >> what kind of a compromise is that? >> the public knew all about that. voters voted and they re-elected the >> maria. >> if i could real quickly finish. the question is this can we make some progress because obviously the two sides, the two parties have different ways of trying to resolve this. let's at least make some progress where even republicans
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have said let's take care of the middle class. let's not hold them hostage to trying to provide tax breaks to the wealthiest americans as republicans have said. >> maria, the president campaigned on raising people's taxes, but he also campaigned on a balanced approach, and that's the part that we have not seen from the president or the democrats in washington today is that balanced approach. we've seen that he wants to raising people's taxes and the can't name one program that he wants to cut. >> that's not true. >> what program do we cut, representative? what program do you think he's going to cut? >> which of the programs under the $1 trillion in cuts that are taking place now under -- >> that doesn't solve the problem. we're returning a $1 trillion deficit every year. >> what part of the $716 billion in spending reductions in medicare that we passed under the affordable care act do you want me to outline? there are, as i said, over $1
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trillion worth of cuts that have already taken place. we need to see the balance. we've seen the cuts and haven't seen anything on the revenue side and it's time to try to do something that's balanced. >> definitely time. >> thanks very much to you both. appreciate the time. >> wish we could go on. >> we'll watching. of course, the next two weeks is going to be so important, bill. >> yes, it is. we still didn't get any answers. >> no, we didn't. >> you tried though, good job. >> the new year just around the corner, and while our next guest expressed concern for europe in 2012, this year his focus for next year is now on the united states. just what should investors expect, you ask? >> let's ask ethan harris who joins us with his outlook from 2013. >> welcome back, ethan. >> how does the next year look to you? >> well, i think it's going to be a very slow start. i mean, this fiscal cliff discussion you're having right now illustrates why there's a
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high risk of a messy outcome with both parties fluilibusteri here. i think we'll start out with weak from the shock of the cliff and austerity measures and i think things will get better in the secretary half once we get past the initial shock, but it's going to be another choppy years. >> the bulls join us often here, ethan. their point is this is such an undervalued market and there's so much cash sitting out there that any deal would be sort of a relief for the markets and get corporations back to capital expenditur expenditures, back to hiring and maybe a bump in the economy. i sense that you don't feel that way >> i think if you could set the cliff aside and we didn't have to deal with it as an issue, you're right. the stock market would be doing quite well. this is a self-inflicted ruined we're getting from washington, but i don't think the market has priced in how messy this is going to get.
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going to get time to get debate in. as we get close to year round, it looks like since they are not going to resolve anything, that some of this will spill over into the new year, i do think the markets will come under pressure. yes, getting the cliff behind us will be great, but i don't think that's going to be quick, and i don't think it's going to be clean. >> if it's not priced into the market, how significant of a selloff might we see? >> it's really hard to tell. in a sense the selloff would be what congress asks for, right? one of the things i'm really concerned about here is to get them to stop the endless debate and actually reach a decision they need outside pressure. we've seen this in the past in europe and other brinksmanship moments. my hope would be that a small correction in the markets, maybe down 5% for a couple of days in a row, would kind of get them back and really force them to kind of make a decision but my
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worry is that that's what it will take there. has to be some external pressure applied to get them to understand the consequences of this endless debate. >> what's the green light you're waiting for to buy then? >> it's -- it's seeing a deal done because frankly i -- i'm not going to jump on the first tentative deal. these things can easily fall apart once they see the light of day and the details come out. i think investors should be careful about going for head fakes, the inevitible stories about they are about to reach an agreement show me the details so that i know whether the deal is doable or not and then i'll determine whether or not they resolve the problem. >> thanks for coming on the program. thanks so much. >> thank you. >> ethan harris joining us. >> and as we head towards the close, the bias has been to the upside. the dow moving higher, a gain of about 81 points. >> our next guest says the white house's willingness to go over the cliff is downright
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irresponsible. orrin hatch is here to tell us whether a deal can be reached in time. >> former deputy treasury secretary roger altman weighs in on that coming up. us online tod. so, i'm happy. sales go up... i'm happy. it went out today... i'm happy. what if she's not home? (together) she won't be happy. use ups! she can get a text alert, reroute... even reschedule her package. it's ups my choice. are you happy? i'm happy. i'm happy. i'm happy. i'm happy. i'm happy. happy. happy. happy. happy. (together) happy. i love logistics.
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is the administration prepared to go over the fiscal cliff? >> absolutely. >> are you okay with that? >> the president is prepared to have the economy go off the cliff if he doesn't get higher income tax rates. what do you think that have? >> i think it's reckless talk. the president insists on his position, insists on my way or the highway. >> yeah, we go from absolute to irresponsible. that's what republican senator orrin hatch of utah calls t statement from secretary geithner and the white house about going over the fiscal cliff. >> senator hatch, the ranking member of the senate finance committee said this is no time for saber rattling but will this the time for compromise? he joins us now to talk more about it. good to have you on the program, senator. thanks so much for joining us. treasury secretary tim geithner told cnbc there will be no deal if it doesn't involve higher rates on the top 2% of the wealthiest.
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when it comes down to it, will republicans budge on this issue? >> it's kind of crazy for him to say that because, first of all, if they got their higher rates and they also included the approximately 1 million small businesses wrapped into it, you know, they would get enough to run the federal government for about seven days. it wouldn't really solve the problems, and, of course, then they are going to come back and say the rest of the 98%, you've got to come up with money yourselves >> i understand, but the point is will you budge? will you go along with it if it leads to a deal? >> i'm pretty close to the speaker who i admire greatly, and none of us really want to raise the rates because we know once we do they will go up and then the spending will never occur. we've had that happen a lot during my 36 years. >> i was going to say, senator. you've been in the senate a long time. you've seen a number of presidents come and go, a number of speakers come and go. the period we're in now, is this the most contentious? are we least likely to compromise? is that a bad word in washington
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anymore? >> republicans stand ready to compromise. we think we can raise enough money for the president through revenue enhancement rather than raising the rates which we know once they go up they will have a heck of a time ever coming back down, and we also know that if you raise the rates like he's talking about, it's going to hurt the economy. it's not going to help the economy and it will attack about 1 mill small businesses and cost us probably somewhere in the neighborhood of 700,000 jobs, according to the analysts who have analyzed this. >> so in terms of raising the right amount of revenue, does that include doing away with the charitable donation loophole? does that include the exemption in terms of the mortgage deduction? would you take those two out? >> well, there are over 100 or more tax expenditures. >> those specific once. >> it means going over those tax expenditures and looking at which ones we can get rid of. in our little exercise in the finance committee we got rid of the 20% of the ones that had
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been on that -- on that tax expenditure bill, so, yeah, we can do a lot of things, you know. i think people would be loathe to try to do away with charitable deductions, but nevertheless, everything should be in the mix, but i'd be loathe to do that. >> we'd like to focus as well on the spending side, sir. >> oh, yeah. >> we're wondering where the cuts for. for example, one we keep bringing up is the possibility of raising the eligibility age on medicare as a way to reduce costs there. would you be in favor of something like that? >> well, of course, i works and so was the president a year ago. the fact of the matter is that the medicare -- part of the medicare program is going to die in four years, and -- and then we know that we have about ten years before medicare is going to go bankrupt, and frankly we can solve that problem for the benefit of the people who are on medicare, preserve medicare and keep it going, and this president doesn't want to seem to get into it and the democrats
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don't want to get into it, and i went through this last election my investment i didn't hear any of these democrats who got elect in the house or senate arguing that we should increase tax rates, i don't think one of them did. >> let me ask this. we just had xavier becerra on, and he said, look, the democrats have already put cuts in place. we've got $1 trillion, he said, and those cuts are -- have been on the table and have begun to get implemented. we've done our share. now the republicans have to tell us what to cut. what's your response? >> maria, you know better than that. you know that's not true. i happen to like xavier becerra, a very bright guy, and he's a friend, but that's just total bunk and everybody knows it. they are not willing to cut seriously. they are talking about coming back from the war and so forth, things that literally will save some money, but have to be used to build up our military in ways so that we can protect this country. let me tell you something.
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they are never willing to do the cuts. they are always willing to increase taxes and instead of use the tax increases to pay down the national debt which is now $16.3 trillion, going up to $20 trillion in this administration, they are not going to use a dime to pay off the debt, and we're going to wind up with even greater debt than we have now and real putting this country in economic really bad circumstances. >> very quickly, senator. you sound like you agree with harry reid, that we're not going to get a deal before christmas. >> it was interesting that harry would say that. the fact of the matter is i think that they really want to go over the cliff because if they do the president gets what he wants. in other words, he's putting the country at a tremendous risk, and have you noticed how many times the president has been willing to sit down in the white house with the speaker? look, the speaker is ready every day. the president just is out there campaigning, as he always does. very effective at that. >> yeah. >> on the other hand, without great presidential leadership,
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there's no way you are going to put this together the way you ought to put it together. >> senator, thank you very much for joining us. >> nice to be with boast you. >> when we come back, the closing countdown. >> that was scary, i'll tell you. >> they are talking past each other, aren't they? >> amazing. >> up next, former federal reserve chairman alan greenspan will weigh in. he says there's no paperless solution to the fiscal cliff. what he thinks is the best possible outcome. that's coming up on the "closing bell" at 4:30 p.m. eastern right here. and we can save you 10% on ground shipping over the ups store.
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90 seconds left. how is your day? here is wall street's day. folk yes so much on washington. optimism this morning. this is where speaker boehner spoke opening the house session and said things that spooked the market and the harry reid comment that came out today. ben willis, what's a trader to do? >> 30 years ago i learned a thing called reading the tape. the guys in washington need a little bit of lesson. the tape is telling them if they get it right we'll go higher. every time they shoot off their mouth and disappoint market it's a clear signal they will do something wrong and the market will tell them very clearly it's going down. >> we have highlighted the two model portfolios our research team put together on the fiscal cliff. lately the one that says we won't go over t